Zionsville Redevelopment Commission (ZRDC)

Town of Zionsville RDC 101 December 11, 2023 | icemiller.com AGENDA • 5:45 p.m. Meet and Greet • 6:00 p.m. RDC – RDC Authority (Brian Crist) • 6:20 p.m. What is TIF/ What are and how do bonds work (Heather James) • 6:40 p.m. What is going on in Zionsville now (Corrie Sharp) • 7:00 p.m. Questions and Answers • 7:30 p.m. End | icemiller.com 2 Heather R. James, Esq. Brian C. Crist, Esq. Partner Partner Ice Miller LLP Ice Miller LLP One American Square One American Square Suite 2900 Suite 2900 Indianapolis, IN 46282-0200 Indianapolis, IN 46282-0200 Heather.James@icemiller.com Brian.Crist@icemiller.com (317) 236-2199 (317) 236-5997 | 3 icemiller.com RDC STATUTE REFERENCE Public Purpose IC 36-7-14 1. clearance, replanning, and redevelopment of areas needing redevelopment under this chapter are PLANNING public uses and purposes for which public money may be spent and private property may be acquired. 2. afford a maximum opportunity for rehabilitation or redevelopment of areas by private enterprise. DEVELOPMENT 4 RDC POWERS • Acquire property (need 2 appraisals BUT can pay more than the average of the 2 (useful if part of an incentive)) • Dispose of property (2 appraisals BUT can sell the property for $1.00. (again, useful incentive)) • Repair, maintain, build structures, etc. • Contract for local public improvements • Issue bonds, enter into leases, accept grants / loans, etc. • “On terms and conditions considered best by Redevelopment Commission” *These are examples from a laundry list; by no means exhaustive. | icemiller.com 5 PUBLIC MEETINGS | icemiller.com 6 Open Meeting Indiana’s Open Door Law • Generally: The Open Door Law permits public access to meetings held by public agencies. Generally, all meeting of the governing bodies of public agencies must be open at all times. The RDC is a Public agency for purposes of the Statute. • What is a Meeting: Meeting is defined as a gathering of a majority of the governing body of a public agency for the purpose of taking official action upon public business. A meeting does not include any to the following:  Any social or chance gathering not intended to avoid this chapter.  Any on-site inspection of any: (A) project; (B) program; or (C) facilities of applicants for incentives or assistance from the governing body.  Traveling to and attending meetings of organizations devoted to betterment of the government.  A caucus.  A gathering to discuss an industrial or a commercial prospect that does not include a conclusion as to recommendations, policy decisions, or final action on the terms of a request or an officer of public financial resources.  An orientation of members of the governing body on their role and responsibilities as public officials, but not for any other official action.  A gathering for the sole purpose of administering an oath of office to an individual.  Collective bargaining discussions that the governing body of a school corporation engages in directly with bargaining adversaries. This subdivision applies only to a governing body that has not appointed an agent or agents to conduct collective bargaining on behalf of the governing body as described in subsection (b)(3). • Official Action: Official action means to:  Receive information;  Deliberate;  Make recommendations;  Establish policy;  Make decisions; OR  Take final action | icemiller.com 7 LAND PURCHASE/SALE | icemiller.com 8 PURCHASING LAND AS A RDC 1. RDC determines area needs redevelopment and cannot be corrected by private sector alone and public welfare would be served by acquisition. 2. RDC creates map of area, list of property (with owners) to be acquired, and estimate of costs (redevelopment project area). 3. RDC passes resolution confirming 1 and 2. 4. RDC’s initial offer cannot be greater than the average of two appraisals. 5. RDC can appoint others to negotiate final purchase price, but all agreements must be approved by RDC. 6. Any agreement that makes payments for more than three years or final purchase price exceeds $5M must be approved by legislative body of the unit. 7. RDC can also purchase property that is blighted, unsafe, abandoned, foreclosed or structurally damaged without 1, 2 and 3, provided legislative body of the unit approves (a) any purchase above the average of two appraisals, (b) makes payments more than three years or (c) final purchase price exceeds $5M. | icemiller.com 9 SELLING LAND AS A RDC 1. Limited public hearing requirements. 2. RDC must acquire two appraisals – appraisals not open for public inspection. 3. RDC publishes offering sheet with a minimum offering price of the average of two appraisals. 4. Offering sheet contains date that bids will be received and opened at a public meeting. 5. In determining best bids, RDC has more specific flexibility than municipality. 6. If no bids are accepted, RDC cannot sell property for 30 days after opening of bids for less than the offering price. 7. After 30-day period RDC can sell property for any price or conditions it deems necessary to further the redevelopment plan. 8. Procedures also apply to leases. | icemiller.com 10 GENERAL CONSIDERATION • Land Value in Capital Stack • Coordination of Land Sale with TIF Financing • Tax Issues | icemiller.com 11 TAX INCREMENT FINANCING FOR PUBLIC PRIVATE PARTNERSHIPS | icemiller.com 12 WHAT IS TIF? • Tax increment financing (or "TIF") is a tool which captures increases in assessed value from new development. • Can always capture increases in real property and, at times, depreciable personal property assessed value (equipment) if a taxpayer is designated as a "Designated Taxpayer”. | icemiller.com 13 Housing Development Method #1 - RDC Statute (IC 36-7-14-39(a)) Toolbelt  Pursuant to the RDC Statute, and subsequent DLGF interpretation, Indiana allows for the capture of tax increment on certain residential properties meeting the following criteria:  Apartment Buildings with 4 or More Units  Condominium Buildings with 4 or More Floors Method #2 – RDC Residential Housing Statute (IC 36-7-14-53,55,56)  More recently, Indiana has allowed eligible units to capture new assessment on 1% residential properties for the purpose of incentivizing private developers to construct new, or renovate existing, market rate homes to meet the demand for workforce housing.  More time-consuming process | icemiller.com 14 TIF Establishment Process Executive and legislative bodies appoint members to establish an RDC 0 Residential Housing Establishment • RDC prepares a redevelopment or economic development plan • Same steps as the standard TIF establishment 1 • Plus… • Consult with persons interested in or • RDC adopts Declaratory Resolution, plan, and factual report 2 affected by the proposed Housing Program • Plan Commission approval (is plan consistent w/ overall plan of development for • Provide affected neighborhood 3 community) associations, residents and township assessors with an adequate opportunity to • Legislative body approval of Plan Commission Order participate in an advisory role in planning, 4 implementing and evaluating the proposed • Publish notice of public hearing and distribute Impact Statement Housing Program 5 • Hold a public meeting[s] in the affected • RDC holds public hearing and adopts Confirmatory Resolution neighborhood[s] to obtain the views of 6 neighborhood associations and residents • Legislative body approval of creation of Area 7 • RDC records Resolution, notifies Department of Local Government Finance 8 ("DLGF") and files documents with County Auditor | icemiller.com 15 TIF AND PERSONAL PROPERTY  Personal property assessed value is  Only qualified personal property not captured by default and cannot investments may be captured: have “blanket” approval  Industrial  Manufacturing  Personal property assessed value may  Warehousing only be captured when a RDC  R&D designates a “designated taxpayer”  Processing  Distribution  RDC must find that the capture of  Transportation personal property assessed value is necessary to support payment of an  The taxpayer’s property may not primarily consist of retail, commercial obligation or residential | icemiller.com 16 THE TERM OF AN ALLOCATION AREA Date Alloc. Area Expiration Date Established TIF area is established TIF expires the later of 2025 or before following the final maturity of July 1, 1995. obligations outstanding as of July 1, 2015. TIF area is established TIF expires 30 years after the date on between July 1, 1995 which the allocation provision is and July 1, 2008. established. TIF area is established TIF expires 25 years after the date after July 1, 2008. the first obligation payable from TIF was incurred. New Residential TIF Not to exceed 20 years Areas | icemiller.com 17 HOW TIF IS COLLECTED  Incremental assessed value multiplied by the property tax rate becomes TIF revenue (collection subject to circuit breaker tax caps).  The new businesses in a TIF Area still pays property taxes on their new private investment. The incremental taxes are captured to repay bonds or to pay directly for projects. The other taxing units forgo the increase in assessed value only during the term of the TIF Area.  Gives RDC NO MORE POWER over property/property owners. . . their taxes are just captured. | icemiller.com 18 WHAT TIF CAN BE USED FOR  Any; (1) capital project that; (2) has an economic development purpose; (3) is in the plan; and (4) is "in, serving or benefitting" or in some cases (if bond issue of the Unit as opposed to the RDC) "in, or physically connected to") an economic development or redevelopment area.  COMMON WAYS TIF IS USED: • Economic Development – to offer incentives to induce new developments • To encourage growth in certain areas (ex. Industrial Park) • To alleviate congestion and facilitate additional growth in developing the area  Educational, work training or other programs designed to prepare individuals to participate in competitive and global economy.  Redevelopment of blighted areas. | icemiller.com 19 BONDS | icemiller.com 20 WHAT ARE BONDS? WHY ISSUE THEM?  In its simplest form, a bond is a debt or a loan incurred by a governmental entity. The bonds are issued and sold to the investing public or private investor or bank, and the proceeds are typically made available to finance the costs of a capital project.  State and local government bonds provide funding for, among other things, critical infrastructure. State and local government bonds finance schools, roads and highways, bridges, hospitals, universities, airports, water and sewer facilities, economic development projects and other infrastructure that powers our economy.  Since public capital facilities provide services over a long period of time, it makes financial and economic sense to pay for the facilities over a similarly long period of time.  The rational response of the state or local official concerned with satisfying the preferences of constituents is to match the timing of the payments to the flow of services, which is the function served by long-term bond financing. | icemiller.com 21 Types of TIF Bonds  Tax Increment Revenue Bonds (tax-exempt or taxable) • Bonds payable solely from TIF (or can add other revenues) • Difficult to market; may add Developer guarantees • Need Reserve Fund and extra revenue coverage of debt service  Economic Development Revenue Bonds (tax-exempt or taxable) • Company is responsible to repay bonds; TIF can be pledged to off-set Developer payments  Special Taxing District Bonds • Bonds payable from a Special Benefits Tax (SBT), which is a property tax levy on the Redevelopment District; also TIF • Counts against 2% statutory debt limit  Lease Bonds • Lease payments from SBT levy, TIF, other revenues • Doesn’t count against 2% statutory debt limit | icemiller.com 22 RDC Lease Bonds cont'd • The RDC may not issue debt in excess of two (2%) percent of the adjusted value of taxable property (i.e. 1/3 of the Redevelopment District's net assessed valuation) in the Redevelopment District. Not all bond issues count against the Statutory Debt Limit. For example, a bond payable solely from tax increment revenues is considered a "revenue bond" and excepted from the Statutory Debt Limit. However, a bond payable from tax increment with a special benefits tax (i.e. ad valorem property tax) back up, would count against the Statutory Debt Limit unless it is issued within a structure that the Indiana Supreme Court has deemed to be an exception. • A recognized exception is to issue lease rental bonds. An RDC may enter into a lease transaction with a redevelopment authority. A redevelopment authority is a three (3) member body created by ordinance of the Common Council and the members are appointed by the Mayor ("Authority"). The sole purpose of the Authority is basically to finance and construct a local public improvement or acquire a local public improvement and lease it to the RDC. | icemiller.com 23 RDC IN ACTION | icemiller.com 24 ZIONSVILLE ECONOMIC DEVELOPMENT AREAS Zionsville EDA Oak Street EDA Creekside 334/700 EDA MetroNet EDA 146th/Appaloosa EDA Holliday Farm EDA Pittman | Farm EDA icemiller.com  FUND 2024 2024 RDC FUND 2023 EOY 2024 Zionsville EDA 334/700 EDA REVENUE $ 1,033,769.00 $ 2,038,037.00 REVENUE: Developer 90% Annual $ TIF Presentation 55,844.10 BUDGET BALANCE CARRY-OVER $ 2,687,996.21 REVENUE: RDC 10% $ 6,204.90 EXPENSE: DEBT PAYMENT 2010 Sewage Works Bond Payment $ (86,968.00) $ (87,874.00) BALANCE CARRY-OVER $ 86,868.60 2012 Bond Payment: EDA Bennett Prkwy $ (368,000.00) $ (371,000.00) EXPENSE: TIF 2016 Bond Payment: Lease Rental $ (236,000.00) $ (234,000.00) 2017 Bond Payment: Refunding $ (405,000.00) $ (406,000.00) EXPENSE: Developer Draw Bond MANAGE A EXPENSE: CAPITAL PROJECTS EXPENSE: CDC GRANT $ (120,000.00) $ (225,000.00) NET 334/700 EDA BALANCE $ 142,712.70 EXPENSE: REAL ESTATE TRANSACTION $ (120,000.00) $ (600,000.00) ~$7.5million budget EXPENSE: PROFESSIONAL SERVICES South Village Planning/Design/Engineering $ (276,000.00) $ (1,000,000.00) MetroNet EDA REVENUE $ 44,819.00 NET ZIONSVILLE EDA BALANCE $ 2,687,996.21 $ 1,802,159.21 BALANCE CARRY-OVER $ - TOTAL Oak Street EDA REVENUE $ 230,000.00 $ 230,044.00 EXPENSE $ (44,819.00) REVENUE $ 7,488,560.06 BALANCE CARRY-OVER $ - NET METRONET EDA BALANCE $ - EXPENSE DEBT $ (1,466,921.00) 2016 First Mortgage: Town Hall $ (230,000.00) $ (230,044.00) EXPENSE: CAPITAL PROJECTS 146th/Appaloosa EDA EXPENSE $ (2,301,700.50) EXPENSE: REAL ESTATE TRANSACTION REVENUE $ 97,571.00 NET $ 3,709,346.66 EXPENSE: PROFESSIONAL SERVICES NET OAK STREET EDA BALANCE $ - BALANCE CARRY-OVER $ - EXPENSE: Developer Draw Bond $ (93,184.00) Creekside NET 146TH/APPALOOSA EDA BALANCE $ 4,387.00 PASS-THRU REVENUE BALANCE CARRY-OVER $ $ 183,401.00 12,609.89 REVENUE $ 291,307.60 EXPENSE Holliday Farms EDA Assignment Agreement Payment to Schools $ (91,700.50) DEBT $ (138,003.00) Economic Development Incentive $ (75,000.00) REVENUE $ 36,201.00 Creekside HOA dues $ (25,000.00) BALANCE CARRY-OVER $ 437,366.44 EXPENSE $ - EXPENSE: CAPITAL PROJECTS EXPENSE NET $ 142,712.70 EXPENSE: REAL ESTATE TRANSACTION EXPENSE: PROFESSIONAL SERVICES NET HOLLIDAY FARMS EDA BALANCE $ 473,567.44 NET CREEKSIDE EDA BALANCE $ 12,609.89 $ 4,310.39 Cash on-hand Pittman Farm EDA: Phase One *does not include REVENUE $ 300,000.00 $ 1,455,000.00 REVENUE: Developer 95% REVENUE: RDC 5% anticipated P3 projects BALANCE CARRY-OVER $ 116,596.92 EXPENSE BALANCE CARRY-OVER $ - Assignment Agreement Payment to Schools $ (183,403.08) EXPENSE: TIF | icemiller.com EXPENSE: CAPITAL PROJECTS EXPENSE: REAL ESTATE TRANSACTION EXPENSE: Developer Draw Bond 26 EXPENSE: PROFESSIONAL SERVICES $ (285,000.00) NET PITTMAN FARM BALANCE $ - NET CASH ON-HAND BALANCE $ 116,596.92 $ 1,286,596.92 ANTICIPATED DEVELOPMENTS & PARTNERSHIPS | icemiller.com | icemiller.com 28 Town Hall Area | icemiller.com  Zionsville Gateway Master Plan “South Village” | icemiller.com  DESIGN 1. ROAD 2. TRAIL 3. UTILITIES | icemiller.com | icemiller.com 32 Other Projects Holliday Farms EDA: Infrastructure • Bond issuance supporting sanitary sewer capacity improvement project, pedestrian improvements along US 421 corridor Anticipated Development TIF requests • Wild Aire Development | icemiller.com RDC 2024 Outlook RDC TIF Revenue READI Grant Annual Notification 2025 Budget application and to taxing 2025 Draft Presentation presentation Fiscal jurisdictions Budget to Council Report 2024 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2024 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC READI Updated 5-Year 2025 Grant due TIF Forecast Budget Approval | icemiller.com 34  Questions & Answers | icemiller.com 35